Dramatic changes in future car retail

As we pointed out in recent posts in our viadoo blog, the automotive industry is going through a massive change right now. Core issues are connectivity, autonomous cars, car sharing services, and electric drive systems. These trends certainly affects the future of automotive retail respective the traditional car dealerships. Their numbers will decrease dramatically within the next years. Today KPMG published its annual Global Automotive Executive Survey (GAES). Therein over half of all executives (56%) are highly confident that the number of physical retail outlets as we know them today will be reduced by 30 to 50 percent already by 2025.

Dieter Becker, KPMG’s Global Head of Automotive said in a press call today: „The absolute majority of execs (79%) strongly agrees that the only viable option for physical retail outlets will be business transformation into service factories or used car hubs.“ In other words: The consolidation of the automotive retail market will escalate. As KPMG points out, there are two reasons for this development:

The obvious fact is that an increasing number of customers can purchase their new private car online.

In addition customers request more and more intelligent mobility solutions instead of owning a private car. The transactions will probably be made on an online platform with multiple mobility solutions for traveling from A to B.

For Dieter Becker it is clear that there will be no single retail model of the future. Instead a variety of retail concepts will co-exist. This might include the industrialization of current retail outlets, and in the long-run an entirely new retail platform, where customers can log-in with their individual ID.

But KPMG focusses on another interesting issue: In the past OEMs have always set up their strategy, sales channels, distribution models and prices for a pure B2C market. However, with the increasing vital demand for new and innovative mobility concepts especially in cities, the consultancy asked whether this will still be the case in the future. Execs show a clear opinion: the majority (67 %) agrees that OEMs will need to say goodbye to a mainly B2C marketplace and will need to sympathize with a B2B market environment, where they will sell entire fleets to mobility service providers – including the risk of giving away the direct customer relationship an data.